After a year of notable growth anticipated in the region of 23–30%, rents in upscale residential districts of Dubai are expected to increase up to 20% in 2024.
Property experts anticipate the continued buoyancy for several reasons, such as the Emirati city’s expanding attraction as a haven for the wealthy, the increased appetite of investors, the influx of professionals, and the population growth.
As to their statement, rental prices would see continuous upward pressure if net migration to Dubai was higher than the rate of new home handovers.
More people choosing to own rather than rent their houses, together with the growing popularity of real estate as an appealing investment option, are two factors that could determine the direction of rents in 2024.
Ilnara Muzafyarova, head of Colife, a real estate management company, says that after a dramatic increase in rental prices by 23% annually in the first half of 2023 and a year-end prediction of almost 30%, the upward trend appears robust.
Muzafyarova projected that short-term rentals (up to six months) would increase by 20% from 2023, while long-term rentals (more than six months) would increase by 15%. The market’s natural expansion serves as a solid foundation for this and from mid-2022 to mid-2023, apartment prices increased by 15%.
S&P predicted in November 2023 that home prices would rise by 5.0% to 7.0% in 2024. According to Tatiana Leskova, associate director of corporate ratings at S&P, there isn’t any proof that Dubai’s property market is slowing down in 2024.
According to analysts at real estate consulting firm CBRE, during January 2020, rents in Dubai have grown by over 42%, while home prices have surged by about 33%. Analogously, villa rentals saw a rise in average rent of 19.2% in November 2023, reaching USD 88,400 annually.
Experts noted that the growing trend in rentals is a reflection of Dubai’s thriving real estate market, where property values are rising in tandem with the construction of new high-rise buildings and a surge in real estate transactions.
Colife, the owner of a one-bedroom apartment in Dubai Marina, had a significant rise in monthly income over the previous year of 21.2%, reaching USD 2,970.
According to Colife, owners should expect even larger returns in the neighbourhood of USD 3,415 per month in 2024.
Real estate analysts predict a steady demand for residential space in Dubai due to the city’s growing population and ongoing influx of international professionals.
The third quarter saw a steady reduction in the growth rate of the Dubai rental market, according to real estate consultancy Asteco. With rental increases for flats, villas, and workplaces of 3.0%, 2.0%, and 4.0% over the three months, there has been a noticeable slowdown. According to Asteco, the changes were 18%, 19%, and 29% annually, respectively.
According to Property Finder’s November research, demand is greatest for one-bedroom apartments. Searches for one-bedroom apartments accounted for about 36% of the population, compared to searches for two-bedroom flats (30%) and studio apartments (24%).
While 42% of those looking for villas or townhouses had three bedrooms in mind, while 35% wanted a larger property with four bedrooms. Some 66% of tenants chose furnished apartments, while 32% sought unfurnished. Of those looking for villas or townhouses, 51% found unfurnished listings and 48% found furnished ones.
The Dubai Statistical Centre estimates that as of July 2023, 3,604,030 people were living in Dubai, up from 3,515,264 in July 2022. The Development Master Plan for Dubai projects that by 2040, there will be 5.8 million people living in the city.